Blockchain Gaming: Industry Transformation
KEY POINTS OF THE ARTICLE
- Overview of blockchain gaming’s growth, with over 804,000 unique active users and $4 billion in investments as of July 2021.
- Explanation of blockchain as a decentralized digital database enhancing data security and accuracy.
- Implementation of blockchain in gaming, enabling players to own, trade, and monetize in-game assets securely.
- Advantages of crypto-based games, including simplified transactions, enhanced security, and true ownership of digital assets.
- Role of Non-Fungible Tokens (NFTs) in gaming, allowing for unique, tradable in-game items and characters.
- Discussion on the play-to-earn model, providing players with opportunities to earn real-world value through gameplay.
- Exploration of decentralized gaming platforms fostering community-driven development and governance.
- Consideration of challenges in blockchain gaming, such as scalability, environmental concerns, and regulatory issues.
- Future outlook on blockchain gaming’s potential to revolutionize player engagement and the gaming economy.
Last year’s Blockchain Game Alliance (BGA) report shows that Blockchain Gaming attracted more than 804,000 unique active users as early as July 2021. And the total investment in such games last year was more than $4 billion.
By comparison, a recent analysis shows that in January and February 2022 alone, Blockchain-based games raised more than $1.5 billion in capital investment. At the end of this year, we can witness more than 100% growth in investment should this trend continue.
This suggests that despite the high speculation and volatility of the crypto space in general, its gaming segment is growing rapidly.
In this article, we share our experience in the field of blockchain based games and explain what blockchain games are, why they are on the rise, and are a smart way to invest money today.
What is Blockchain?
A blockchain is a decentralized digital database shared by computer network nodes. But why you should switch to blockchain now? One of the key differences from a regular one is how blockchain data is structured. The information is grouped into blocks of a certain capacity. Each of them is securely encrypted and sequentially added to the chain.
The main value of blockchain technology is that it guarantees high security of data and accuracy of their recording, which creates trust without the need for third-party intervention. That is why the technology has become widely popular in many cryptocurrency systems, such as Bitcoin and Ethereum. Because transaction recording is completely decentralized and secure.
This specificity of the technology opens up interesting prospects for its application in various fields, but especially in online video games. How can a blockchain shake up the world of traditional gaming and change our attitude towards it forever?
How Blockchain is Implemented in Gaming?
A blockchain game is like a standard one, but using blockchain technologies. What does it mean? Players can earn and change various gaming assets. Because the blockchain system is decentralized, all digital assets are owned and controlled solely by players, not the development studio. This allows you to trade and transfer digital assets to other players through the game or third-party marketplace, thus converting them into cryptocurrency.
Such blockchain video games provide users with a unique gaming experience with full ownership of in-game assets. Also, blockchain in gaming allows you to create in-game items and characters independently.
What benefits does this give players and developers? Let’s see.
Advantages of Crypto-based games
Online games have many disadvantages and problems, including the already mentioned fraud in transactions. Therefore, there are several benefits to using cryptocurrencies in online games. Below we will try to list the main ones:
- Cryptocurrencies simplify transactions because they do not require a third party.
- Blockchain makes in-game sales and purchases much safer.
- Crypto games provide high-security storage of in-game assets.
- Blockchain provides a secure decentralized space for game development.
- Blockchain allows players to truly own in-game assets based on smart contracts.
And all this brings us to the question of the role of NFT in blockchain and gaming. Let’s try to understand how it works.
Role of NFT in Gaming
In the first half of 2021 alone, the global NFT market was worth $2.5 billion, as Reuters reports. For comparison, in the first and second quarters of 2020, its value was 13.7 million dollars. In other words, NFT has become an essential part of the market. As a result, more and more companies are integrating them into their gaming business.
Why NFT is so Important?
NFT is any digital asset whose source code is wholly owned by the buyer, as evidenced by a smart contract. In the game, it can be not only skins but also collections of individual items such as clothing, accessories, or weapons.
NFT plays a crucial role in blockchain video games because one can trade such assets for real cryptocurrency. Because the buyer has the source code, such digital assets will remain with him, even if the game stops working. Moreover, NFT can be transferred and used in a new game.
Thus, NFT is a new type of content that stays with players as long as they want. According to statistics on the number of players in NFT-based games, the added value of such content is shaping the new “blockchain and gaming” economy and boosting the entire industry. Are you wondering what such games look like in practice?
Top Trends in Blockchain Gaming
The popularity of Blockchain-based games is growing steadily. And there are constantly new releases that capture genre niches and gain popularity among gamers. So we suggest you take a look at three trends to follow in 2022.
Play-to-Earn
For example, based on the principles of NFT, a particular type of game called “play-to-earn” emerged. In such games, the player becomes the full owner of the items acquired during the game progress.
This model has attracted many play-to-earn game developers, who are focusing on creating immersive gaming experiences that reward players with real value. By leveraging blockchain technology, these developers ensure that players can truly own their in-game assets and monetize their skills and achievements.
For example, Axie Infinity is gaining popularity. Its developers believe that it is unnecessary to manipulate players to make them throw a lot of money on the process or skins. Instead, it is important to value the game by giving players the ability to own assets that can be resold.
It is NFT technology that makes this possible. Blockchain technology allows players not only to spend time with pleasure but also to earn a currency that has real value. This has led to a new digital gaming economy where users receive rewards and financial services. Thus, games become a potentially lucrative way to generate a steady income.
Social Media Aspect
Some of the new blockchain games, such as Near Land, are built as hybrid platforms with social networking features. Pixel game with open-world Near Land offers players the usual game progress and a sense of community. Players together can create characters and objects while experiencing adventures in the open world.
An even more compelling example is the Reality Chain, which is completely built on the principle of social communication in the virtual world. In Reality Chain, players improve their social and gaming position with a 2D and 3D multiplayer experience.
Have you already guessed what we are talking about? Yes, these examples bring us closer to another trend in blockchain-based games, which is natural for this technology – the metaverse.
Metaverse
The metaverse is a set of digitally interconnected and interoperable services and worlds. Today it is the number one topic in the world of digital services and a trend that everyone has taken for granted.
The difference between blockchain technology is that it gives full compatibility between all platforms supporting it. Cryptocurrencies, NFT, and other decentralized assets are easily transferred between crypto games. We should also note digital currencies, which are becoming universal virtual cash. As already mentioned, this forms a separate, fully digital economy that lives its own life.
Therefore, it can be argued that blockchain in gaming will naturally continue to move toward mutual integration on the principle of the metauniverse.
We at Whimsy Games have experience developing metaverse games. Such innovative games offer a thrilling gaming experience, so we use the latest technology to reveal this most exciting metaverse.
Key Challenges in Blockchain Gaming
Not everything and not always goes smoothly with every innovative concept. Some things are holding back the spread of blockchain video games. Sure, it will be vital for you to consider these things before you decide, right?
The Blockchain Trilemma
In particular, the so-called blockchain trilemma remains a problem. This term refers to the triangle of interrelated phenomena of decentralization, scalability (speed), and security. Scalability, in this case, is how many transactions the game can handle the system over a while. Ideal when they are all balanced in games at the highest level.
However, at the moment, developers can not achieve this. If the game is decentralized and secure, it may not be as fast as players expect. Traditional gaming savings work quickly and smoothly. However, blockchain-based decentralized economies are slower.
A striking example is the successful blockchain game CryptoKitties. At some point at the start of the game, the number of transactions reached the scale of Ethereum. At that time, it happened with about 100,000 users. Importantly? Yes. Let’s move on to another.
Pay-to-Win
Another problem with the sector’s growth is the old Pay-to-Win formula and its balancing. Many of these games essentially offer the opportunity to earn just by playing. However, they require an initial payment for either tokens or NFT items. However, not all beginners may have the resources to do so.
For example, in Axie Infinity, a game in the style of Pokemon, players are fighting for a chance to win real prizes. However, to begin with, the user must purchase at least three virtual creatures for these battles. Unfortunately, each of them costs at least $70, which leads to an initial investment of $210.
Against this background, special guilds have appeared, such as the Yield Guild Games in the Philippines. They lend new entrants such in-game assets in exchange for future profits from their wallets. Another phenomenon of the new economy that allows one player to find investment and passive income for others.
Do you want to create your own NFT game? Feel free to contact us!
The global gaming sector is huge, with global industry revenue reaching $176 billion in 2021, and the lion’s share of that money came from mobile gaming. And today, the gaming industry also includes blockchain games, and they will prove themselves in the future.
So if you want to create a viral game, think about the benefits of a blockchain and all described above. If you are looking for skilled game developers to create your own blockchain game, Whimsy Games can help you with that.
Our developers have extensive experience in developing blockchain-based games of various genres – fantasy, sports, adventure, and more. We use the most modern tools and approaches because we understand the specifics of this segment. In doing so, we can help you create your own marketplace where users can trade their gaming assets using cryptocurrencies. And all this is on different platforms, including Android and iOS.
Leave your request and we will contact you to discuss all the details.
Conclusion
The great thing is that for blockchain games now is just dawn. Therefore, the formation of the market and a full-fledged ecosystem is essentially just beginning. The world is moving towards the widespread use of cryptocurrencies and all related products will soon become the new norm.
Progress was a bit slow until recently, but more and more developers are beginning to pay attention to this sector. Of course, everyone wants to release a “killer game.” Companies that do not have time to take action will eventually find themselves catching up.
This situation opens up an immense number of opportunities for all those wishing to participate in forming a new market. Therefore, if you are interested in blockchain video games, hit us, our specialists will be happy to advise you.
